An attractive loan offer was received from a bank for a commercial building re-financing (10 yr fixed at 6.25%). After all preparations (appraisal, title, etc.) signing of all paper work was scheduled. It was discovered during the signing process that the bank placed a condition into the promissory note allowing increase of interest rate by 6% in case of any default. A very broad definition of the default was included also. Practically any late payment could be considered as default. It looks to me that this significant condition had to be disclosed at the beginning of the lending process. Obviously the note was not signed. I am trying to negotiate with the bank a condition where a default may be cured within 30 days before it could be considered a default and the 6% increase takes place. In case the bank will not agree, can I ask for my deposit back ($10,500)? Can the bank intrap customers by not providing full disclosures upfront?

A higher rate in default is not uncommon.

Yes, you should be able to negotiate a right to cure. 30 days isn't unreasonable from what I have seen, but I don't know about your particular bank.

As far as disclosing commercial loans in advance, there are no federal regulations that require commecial loans to be disclosed like consumer loans are.

You may get some of your deposit back, but any charges paid to third parties, such as the appraisal, are probably not going to be refunded. And banks vary on whether they will refund fees for their time spent in preparing the loan as well.